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This week Greece decided to revise up its gross domestic product by a quarter mainly to reflect “shadow” activity, including prostitution and people-smuggling. For those who have frequented Athens’ Piraeus harbour after dark, the real surprise was that the revision wasn’t larger. In absolute terms, a $55bn upgrade is peanuts. In 1987, Italy decided its GDP was $141bn bigger in current dollars, or 15 per cent, after incorporating citizens’ moonlighting. Last year, China coolly raised GDP by $288bn, or 17 per cent.

Revisions may reflect technical inadequacies. Sri Lanka has half as many statisticians per capita as Britain – that is, assuming the figures are right. But it is also inherently hard to measure the “grey” areas of illegal activity and undeclared legitimate activity. They occur most in emerging economies suffering from bureaucracy, weak banks and corruption. Professor Friedrich Schneider estimates that Africa’s legal grey activity equated to 43 per cent of official 2003 GDP.

Developed countries should not be smug – their grey contribution equates to between tenth and a fifth of stated output and may be growing. The Bank of England’s governor has admitted that official data on immigration are “very, very limited”. What is more, as activity shifts towards the non-tradeable and intangible, value becomes even more subjective. How does one verify, for example, quality improvements in an online game? Perhaps in the future idleness may become valuable, along with the endeavours of pimps.

Copyright The Financial Times Limited 2017. All rights reserved.
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